Performance-based financing (PBF) in low- and middle-income countries: What is the theory of change, actually?

 Validity of economic rationale behind PBF is limited

 Principal-agent theory does not hold in complex systems such as health:

 Multitasking problem  multiplicity of outputs

 Outputs are not observable at no cost, without noise  difficulty and cost of correctly measuring performance

 Some outputs are not dependent on agents’ efforts

 Agents are not risk-neutral  unfairness of transferring risk to healthcare providers

 Complexity of health workers’ remuneration schemes  incoherence of incentive scheme

 Health workers are not pure homo oeconomicus

 Elusion of ancillary components beyond financial premiums  Does not take context into consideration

 Little empirical endorsement of the P-A theory (Prendergast 1999)



 Review of experiences: “all [PBF] programmes had weak theories of change at start-up” (Norad 2015b)

 The theories used to justify PBF to date are few and insufficiently credible

 Studies aimed at uncovering the ToC of PBF are recent and unfinished

 Most existing PBF ToCs are not theory-based

 Actors need to make the theories underlying their interventions more explicit, disentangling the PBF package  Performance premiums conditioned on

reaching a number of predetermined

performance criteria may not be justified  If PBF is justified neither by strong

theoretical arguments, nor by generalizable evidence, it is definitely marked by a neoliberal ideology, and the promotion of lack of trust and competition over cooperation between actors in the health system

 Taboo: Is the debate over PBF definition a way to conceal the debate over PBF ideology ?

• Theory-based evaluation has progressively imposed itself as more appropriate approach to study complex issues

• There are few theory-based evaluations and partial attempts to “open the black box” of PBF and identify its ToC / programme theory / causal pathways / mechanisms / transmission of effects…:

• World Bank’s RBF evaluation toolkit (Vermeersch et al. 2012): outlines some possible ToCs

• Perakis and Savedoff (2015): 4 kinds of channels through which results-based approaches

could produce results: (1) financial incentive; (2) results indicators; (3) accountability; (4) autonomy

• Nimpagaritse et al. (2016): tracks for transmission of effects for health facility performance:

1) income; 2) cash; 3) incentive; 4) information; 5) supervision & enforcement; 6) culture at provider level; 7) health system

• Lohmann et al. (2017): six categories of motivational mechanisms: (1) periodic wake-up call

to deficiencies in day-to-day practice; (2) direction and goals to work towards; (3) strengthening perceived ability to perform successfully at work and triggering a sense of accomplishment; (4) instilling feelings of recognition; (5) altering social dynamics, improving team work towards a common goal, social pressure; (6) offering a ‘nice to have’ opportunity to earn extra income

• More elaborate intents of ToC found in literature include for instance: • Fragmentation of the literature and abundance of (often overlapping)

theories that explain the rationale and functioning of results-based financing approaches (Jahn et al. 2013, Selviaridis & Wynstra 2015, Paul & Renmans 2018)

• Sina Health (2017) PBF course identifies a number of so-called “theories

underlying PBF”: Systems analysis; Public choice; Contract theory; Microeconomics and free market principles; Health economics & public health; Decentralisation; Good governance

• Most commonly used theory to justify PBF = the principal-agent theory:

• Objective: to better align healthcare providers’ incentives with populations’ interests

• Rests on very restrictive assumptions (see below)

• Other currents referred to justify PBF belong to the broad New institutional economics – Property rights theory (Meessen 2009), Transaction

cost economics (Selviaridis & Wynstra 2015) – as well as: Behavioural

economics (Eichler 2006, Chowdhury et al. 2013), Political economy theories (Norad 2015a)

• Few non-economic approaches: Management control theory (Selviaridis & Wynstra 2015), Operations and supply management (Selviaridis & Wynstra 2015),

Contingency theory (Barnes et al. 2015)

To explore (i) the theoretical justification of PBF and (ii)

the theory of change (ToC) in the health sector in LMICs

Performance-based financing (PBF) is expanding in LMICs, despite it has been criticised for potential perverse effects (Paul et al. 2018); unintended effects are demonstrated (Turcotte-Tremblay et al.

2017). Attributing results to PBF as such is difficult because (i) health systems inherently

comprise “structural” incentives and are subject to various reforms; and (ii) there are misunderstandings and controversies about the mere definition and the theory behind PBF.

PBF schemes encompass different components (e.g. financial premiums conditioned on reaching pre-agreed results, focus and feedback on key performance indicators, coaching, additional resources at facility level, …) and their designs may infinitely vary. Yet, we still do not have a clear and consistent explanation of why and how PBF is supposed to produce results.

Much of the current cross-disciplinary PBF research lacks a sound theoretical basis (Selviaridis & Wynstra 2015)

W

hat is the theory of

change,

actually ?

Source: Renmans D, Holvoet N, Criel B, Meessen B. Performance-based financing: the same is

different. Health Policy and Planning, 2017, 1–9

Source: Borghi J, Singh NS, Brown G, Anselmi L, Kristensen S. Understanding for whom, why and in what circumstances payment for performance works in low and middle income countries: protocol for a realist review. BMJ Glob Health 2018;3:e000695

1 _{Université de Liège, Faculty of Social Sciences*, Liège, Belgium; Email: [email protected] ; [email protected]} 2 _{Université Libre de Bruxelles, School of Public Health, Brussels, Belgium} 3 _{Institut de Recherche pour le Développement, CEPED (IRD-Université Paris Descartes), Universités Paris Sorbonne Cités,}

ERL INSERM SAGESUD, Paris, France; Email: [email protected]

Elisabeth Paul

, Oriane Bodson

, Valéry Ridde

Performance-based financing (PBF) in low- and middle-income countries :

Discussion

Theories

Theory of change (TOC)

Introduction

Conclusion

Objective